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Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
SIV Investment Problem
Std VC/PE Products• SIV 4 yrs VC/PE 10 yrs;• No early exit;• High risk;• Return at end;• No Investment selection;• Few complying funds;• Complicated & difficult entry;• High Fees;• Questionable Team credibility.
Complying Investment Framework
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
SIV Investment SolutionElcano Franchise Fund 1 –
Clearing Pool Class Units• 4 yr term;• Unit resale;• Moderate risk;• 9% ROI*• Quarterly payments;• Simple & easy entry;• Low Fees;• High Team credibility.* Projected
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
Elcano Vs. Other VCPE
Low: where debt is able to convert to SPV units.
Very High: of 10 – 6 fail, 3 break-even, 1
success
Yield: paying quarterly On exit (towards end of life)
Quasi Fixed Interest Capital Gains
Moderate: via residual capital holding (not in
projected return)Moderate
4 Years 10 - 12 Years
Fund Manager makes all investment decisions
Fund Manager makes all investment
decisions
1. With the ability to extend to 5.5 years.
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
Genuine VC/PE
Elcano Franchise Fund
Elcano Vs. Other VCPE
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
Low to High: the pool will vary but may be
across industries, geography, and
franchise system
Low: Australian VC/PE products mostly focus on a single industry and will have less than 10
investees
Low: 1% Entry, 1% Facilitation, and 1.25%
- 2.5% RCH
High: Management Fee 2% p.a. Carried
Interest 20%Low: this is a once-off
investment poolwith only 10 million
units
Low: Short capital raising window
Moderate: unit basis ability to on-sell
Low: no ability to exit early
Elcano Vs. Other VCPE
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
Full model, notes and assumptions should be considered and are available from Elcano Capital
Elcano Franchise Fund 1 Year 1 Year 2 Year 3 Year 4 Year 5INCOMEInvestment 1,000,000- Principal 165,830 181,386 198,401 217,013 218,392 Interest 83,270 67,714 50,699 32,088 9,950 Residual Capital Holding - - - - 30,000 Total Income 249,100 249,100 249,100 249,100 258,342 1,254,743 EXPENSEEntry Fee 10,000 - - - - Facilitation Fee 9,252 7,524 5,633 3,565 1,106 Residual Capital Hoding Fee - - - - 15,000
Total Fees 19,252 7,524 5,633 3,565 16,106 52,080 1,202,663
VC Industry StdINCOMEInvestment 1,000,000- - - - - Interest - - - - - Sale - - - - 1,275,389 Total Income - - - - 1,275,389 1,275,389 EXPENSEManagement Fee 20,000 20,000 20,000 20,000 20,000 Carried Interest - - - - 55,078
Total Fees 20,000 20,000 20,000 20,000 75,078 155,078 1,120,311
Elcano Vs. Other VCPE
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
Directors
Graham Hart AMChairman
Darren LelliottManaging Director
Stephen RasmussenDirector
Nicole OttMarketing & Sales Director
Elcano Vs. Other VCPE
David GowDirector
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
Elcano Franchise Fund 1 LP• Elcano Capital LP – Australian domiciled
fund manager;• Operated by Elcano Pty Ltd -
AFS licence 462624;• EFF1 is conditionally registered VCLP with
AusIndustry;• Compliant to receive mandatory $500K
VC/PE investment for SIV.
Elcano Franchise Fund 1
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
Elcano Franchise Fund 1
10 Million Clearing Pool Units
500,000 Franchisee A class Units
Franchisee A
P & I @10%
SIV Investor
P & I @ 9%
Buy debt (as units) @ 3.25%
discount
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
• 1,160 Franchise Systems;• $144 billion sales turnover;• 14% GDP;• Employ 461,000 people;• Only 1.5% (av) of franchisees in dispute with
franchisor;• Sector average growth 7.79% p.a.;• 16 industry categories;• Franchisees outperform company stores 5 – 15%
revenue, 10% lower wage costs*.
Aust Franchise Sector
* Business Review Weekly, Franchisees trounce company-owned stores in major study, 28/3/14
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
• Funding• 2nd largest industry challenge • 5% (app. 60) bank funding arrangement
Aust Franchise Sector
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
Franchise Systems
Franchisee Assessment 30%•Track record
•Net asset position•Training/education
Franchise System Assessment 70%•Only Tier 1 & 2
Franchisors•Proven business model, adequate funding coverage•Robust franchisee
assessment, training, support.
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
Franchise Systems
Expressions of interest held, no Listed Franchise Systems appointed until Clearing Pool units issued.
Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
• Minimum $500k – Maximum $3 million• 5% draw-down on application• Residual draw-down ASAP• Information Memorandum with Application Form
SIV Applications
CLEARING POOL CLASS UNITS
Information Memorandum& Application
For further information please contact:Darren Lelliott (Managing Director)
Mobile: 0431 775 252 [email protected]
